Fitch warns Greece over political uncertainty

The global ratings agency, Fitch, has warned Greece that prolonged political uncertainty could damage the country’s sovereign rating, as Athens has called for a snap general election.

The agency made the warning on Tuesday, as Greece is preparing to hold early elections on January 25 following the parliament’s failure to elect a new president.

Fitch said it is unclear whether any single party would be able to form a government on its own, adding that the political uncertainty is likely to last for some months after the vote.

In addition, the agency said a political stalemate would “increase the risks to Greece’s creditworthiness” and risk further delays to bailout negotiations and a potential drop in bank deposits.

The remarks came as Prime Minister Antonis Samaras requested that parliament be dissolved following the failure by lawmakers a day earlier to elect Greece’s new president after three rounds of voting.

An opinion poll published late Monday gave the anti-bailout Syriza party a three-point lead over the conservatives, indicating the need for the formation of a coalition in the country.

Syriza is a fierce opponent of Greece’s bailout deal with the International Monetary Fund (IMF) and eurozone countries, and has vowed to reconsider the austerity measures that have caused mounting dissatisfaction in the country.

Earlier this month, Samaras warned that snap elections would be a fatal blow to Greece’s crucial financial talks with the European Union and the IMF, saying that it would bring about catastrophic consequences for the country.

Greece nearly went bankrupt in 2010, only to survive on international rescue packages. It has received 240 billion euros (USD 330 billion) in international loans.